HomeMy WebLinkAboutStaff Report 4.A 12/05/2005CITY OF PETALUMA, CALIFORNIA
AGENDA BILL
Seunda
Title: Resolution Approving Modifications to the `City of Meetine Date: December 5, 2005
taluma Homebuyer Program's Policies and Procedures
Meeting Time: ® 3:00, PM
❑ 7:00 PM
Cateeory (check one): ❑ Consen"t.Calendar ❑'Public Hearing ® New Business
❑ Unfinished Business
❑ Presentation
Department:
Director: \
Contact Petson:
Phorate Number:
CDD/Housing
Cost of Proposal: None:
Mike Moo e 1 Borine 6'aebler
Program Modification Only
77844.84 (Direct Line)
Account Number:
Fund 2130 P202001
Amount Budeeted: $500,00.0
Name of Fund:
Homebuyer Program
Attachments to Aeenda Packet Item_ :
Exhibit #1. ` Draft Resolution
ummary Statement: Prospective first time homebuyers with low -to -moderate incomes have been the
enefciary of several programs which•have assisted their entry into homeownership in the nation's fourth
least affordable housing market: The City participates .in.the Mortgage Credit Certificate (MCC) program,
a federal program which is administered. county -wide. Ninety-three Petalumans achieved homeownership
using that program before our housing prices soared above. the program's purchase price guidelines.
Through the City's Inclusionary HousingTolicy, the City.has provided 1.46 homes in six subdivisions, built
specifically for first time homebuyers. Additionally, the City provided.assistance to 18 families in a second
mortgage program which was implemented in conjunction with Sonoma. County.
All of these programs incorporated :several Council informal policies: (1) Administer income limits at
100% of the Petaluma Median Income; (2) Sell only to first time homebuyers (cannot have owned a
principal residence for past three years); '(3) Preference to people who currently live/work in Petaluma..
Staff is recommending modifications which will allow: (1) Sales to households earning up to 120% of
median (currently $90,000 fora:family of'four); (2) Sales to selected non -first time homebuyers who work
in Petaluma but own a home elsewhere; and'(3) More specific targeting to City employees, school district
employees and public safety workers.
Recommended City Council Action/Sweeested Motion: Adopt Resolution Approving Modifications to
the City of Petaluma Homebuyer' Program's Policies and Procedures
evi ed by Admin: Svcs.'.Dir:
ate tl���Of
Tod av'a Date:
November 1, 2005
Reviewed by City Aitornev:
. Date:
'Revision # and Date `Revised:
AQprO Citv Manager:
AN Date:
File Code:
2005 homeownerchanges/h/d
CITY OF PETALUMA, CALIFORNIA
DECEMBER 5, 2005
• AGENDA REPORT
FOR
Resolution Approving Modifications to the City of Petaluma.Ilomebuyer. Program's Policies and
Procedures
1. EXECUTIVE SUMMARY: Prospective first time homebuyers with low -to -moderate incomes have been the
beneficiary of several progr_ams-which have assisted their entry into homeownership in the nation's
fourth.least.affordable housing market. The City participates in the Mortgage Credit Certificate (MCC)
program, a federal program which is administered county -wide in Sonoma County. Ninety-three
Petalumans achieved homeownership using that program before our housing prices soared above the
program's purchase price guidelines. The Cityhas provided 146 homes in six subdivisions, built
specifically for first time homebuyers. Additionally, the City provided' assistance to 18 families in a
second mortgage program we implemented in conjunction with Sonoma County.
All of these programs incorporated several Council informal policies: (1) Administer income limits at
100% of the Petaluma Median Income; (2) Sell only to first time homebuyers (cannot have owned a
principal residence for�past three.years); (3) Preference to people who currently live/work in Petaluma.
Staff is recommending modifications which will allow: Sales to households_ earning 120% of median
(currently $90,000 for a family of four); (2) Sales to selected second -time homebuyers; and (3) More
specific targeting to City.employees, school district employees and public safety workers.
BACKGROUND: The City's 20-year',old homebuyer'program has been extremely successful. We have
been able to provide homeownership in 241 homes, serving approximately 800 people (counting initial
sales and re -sales). Unlike many other communities, our program has been relatively problem -free with
only one near -foreclosure and one home which required City rehab upon sale due poor maintenance.
Like all other cities with hornebuyerprograms, our resale controls are no longer effective because of the
region's soaring real estate prices. Consegueritly; with the next below -market -rate development at
Southgate, we will be implementing a new vehicle to maintain perpetual affordability (ground lease).
Staff is recommending the aforementioned changes based,.on our experience with the program; in
response to many requests,, questions and recommendations from our current and potential customers;
and, in reaction to forces in the real estate market:
ALTERNATIVES: 1Maintain current policies and procedures. 2. Direct staff to implement
recommended changes. 3. Direct staffto research and/or implement other policies and procedures.
4. FINANCIALJMPACTS Increasing'limits should allow homeownership with limited additional city
subsidy; the other recommendations have no financial impact.
6. OUTCOMES OR-PERFORM�ANCE MEASUREMENTS THAT WILL IDENTIFY SUCCESSOR COMPLETION:
The number- of people who are able to purchase their homes will increase.. There is a potential that
commute traffic will be lessened, by allowing people to live and work in, Petaluma. There is the
potential "that ,additional public safety workers will be available in case of emergency because they can
own a home and live where they work.
7. RECOMMENDATION : Adopt the recommended resolution.
ter;
RESOLUTION'APPROVING MODIFICATIONS TO THE CITY OF
PETALUMA HOMEBUYER PROGRAMS POLICIES AND PROCEDURES
WHEREAS the City of Petaluma administers a homebuyer program to assist low
and moderate income households in achieving the American Dream of
homeownership; and
WHEREAS the City Council -has, over the years, set forth informal policies
regarding the.homebuyer-program including:, (1) sales only,to first time
homebuyers; (2)qualifyingIncome-restricted to 100% of area_median income; and
(3) sales to people who cur"rently'live/work in Petaluma; and
WHEREAS changes in these -policies are being recommended due to changing
circumstances in the real estate market;
NOW THEREFORE BE IT RESOLVED that the following modifications be
instituted in the homebuyer program:
(1} Sales to non -first time buyers will be allowed on a limited basis;
primarily for persons who work for•the City of Petaluma but
currently own a house, out-of-town;
2} Sales to households earning up to 1,20% of Area Median Income;
3} Preference to City employees which will include special marketing
techniques for public safety employees